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Tax clampdown on Brighton and Hove restaurants
Restaurants are being targeted in a £2.5 million tax crackdown.
HM Revenue and Customs (HMRC) plans to swoop on Brighton and Hove eateries to go through their books in a bid to collect evaded tax.
But it is feared that stringent enforcement could send many businesses to the wall.
Taxmen have trawled records in Sussex and the South East and identified the city as a hotbed of potential tax evasion.
Restaurateurs can expect visits from a taskforce of HMRC officials demanding to go through their books.
The restaurant trade is believed to be one where tax is under-declared, partly because of its high turnover and the frequency of cash payments.
Since May 2011 30 taskforces have been set up around the country in a bid to collect £7 billion in evaded tax.
So far £50 million has been identified nationally.
Typically they have focused on 300 businesses at a time in what officials describe as “intensive bursts of activity”.
The taskforces examine records to decide if investigations are needed.
It is understood they are aiming to find out where money is owed and get it back, rather than pursue criminal prosecutions.
In the South East and Solent, HMRC is expecting to find £2.5 million in money owing.
Karl Jones, the owner of Moshi Moshi in Bartholomew Square, said some restaurants could go under if hounded for their tax.
He said: “This could be the final straw for a lot of businesses.
“The pressure will be too great. The fact is, VAT is much too high for restaurants to cope.
“They are already under tremendous pressure to pay their suppliers.
“I hope they can see the difference between unscrupulous restaurants who are setting out to evade tax, and the hard-pressed reestauarants who are finding it a legitimate struggle to pay their tax.”
Exchequer secretary David Gauke said: “We have made it clear that we will not tolerate tax evasion and we are determined to crack down on the minority who choose to break the rules.
“Everyone needs to pay the taxes they owe in full. It is not fair that at a time when most hard-working people are paying the right tax, others are trying to get out of paying what they should.”